April flowers brought May showers?
After a strong price upswing in April, Domain re-sale prices dropped by 2.5 percent in May, sending the Internet Domain Name Index IDNX back to March levels.
May featured a pretty interesting transaction with MOMS.com closing at $252,000 at Sedo.com. For the three applicants (including Google) competing for the right to issue new .MOM domain names, this sale offers a rare opportunity of market feedback: How much could a new gTLD be worth given that the corresponding .COM domain sold for a quarter million dollars?
The latest estimates for the Internet Domain Name Index (IDNX) show a 2.4% increase of resale prices in April as compared to March. The number of sales remained at similarly high levels to March.
Obviously, we will never know whether prices would have gone up even more if new gTLDs were not being released in just a few months. Nevertheless, these figures indicate that the massive expansion of the domain name space happening with ICANN’s new gTLD program is not depressing domain markets. Are the new extensions an addition to rather than a substitute for existing domains?
After several months of weak prices, March brought fresh dynamics to domain markets. Not only did the number of transactions increase by 11 percent over February’s values (March being 3 days longer did help), but prices also went up by 3.7 percent.
Domain prices continued to show weak returns with resale values in February trailing January estimates by 1.4 %. In the same time period, the total number of sales remained strong, documenting a healthy market environment.
As a side note, the average sales price at Sedo went up in February, which means that, relatively, many high quality domains have sold this month.
The Internet Domain Name Index (IDNX) estimates prices for domains in January 2013 to be 1 percent below its December 2012 values. Over the last 12 months, re-sales prices decreased by about 1.3 percent. This sluggish performance makes domains more affordable in comparison with IT stocks tracked by the NASDAQ 100 index, which appreciated by 5.4 percent in the last year.
I have the honour to present my research on domain name valuation at the annual ASSA/AREUEA meeting in San Diego. I would be delighted to see you there!
Friday, January 04, 2013
Time: 10:15 AM
Location: Marriott Marquis & Marina – Rancho Santa Fe 3
It is the last day of the year – a good time to take out the crystal ball and to make some wild guesses and bold predictions about 2013.
Read my thoughts on domain markets in the new year at Elliot’s Blog:
“Market believes that new extensions will add to to domain markets, not cannibalize them …”
During October and November, prices for domain names cooled off, as the newest updates from Internet Domain Name Index IDNX show: Overall, prices for domains fell by 3.6 percent since September. This below-par investment performance of domains is similar to the slightly negative returns on IT stocks in the last few months.
But there is good news as well: Sales volume went up by about 30 percent in the same time period, showing that demand for domains remains strong. Domain investors apparently used the opportunity to realize some of the substantial value gains that domains have enjoyed in the last 2 years.
Prices paid for domains increased by 1.5 % in September, as the newest IDNX estimates show. Liquidity picked up as well, as more domains changed owners in September than in the months beforehand. Both are signs of a healthy secondary domain market.
Looking at the trend, it is striking that “peak” of high prices during summer 2012 has extended to a “plateau” of high domain prices which exceeds even the highest values from 2007 and 2010. This seems to indicate that high price levels are not just a summer fling but something more substantial.
The long-term balance between returns in the IT industry and investments in domains continues, despite short-run deviations from trends in the NASDAQ 100 stock price index (which actually decreased in September). When comparing IDNX to IT stocks, domain prices are not excessively high, which is another indicator that the current price levels are sustainable.
However, domains could not keep pace with Google’s stock performance. Last quarter, Google was just an incredibly good investment.
Glad to see that domainers had a nice summer vacation – and even better to find traders getting back to work in August. The number of sales last month picked up and exceeded the number of sales in July by 12 %. IDNX shows a return of +0.6 % for domain investments during August.